Answer to Question #200039 in Economics for mahima

Question

Risk Management is a predominant function of the Treasury unit in a Bank. Relate the

concept of Risk Management and types of risks in the context of various activities of the

Treasury unit in a Bank

Answer 1

Risk is a situational characteristic of the activities of any manufacturer, including a bank, reflecting the uncertainty of its outcome and possible negative consequences in case of failure. Risk should be understood not only as of the bank's ability to remain at a loss. It is worth noting that throughout the entire process of the bank's functioning, there is little or large probable work exclusively for profit since the majority of banks strive to obtain the highest possible profit, which will increase both market competitiveness, as well as the level of attractiveness for clients.

This topic is relevant, because for every enterprise, without exception, there is a problem of risks. This study aims to determine the risks arising in the course of the activities of banking organizations. The main task is to define such a concept as “risk”, as well as ways of solving the problems arising from the emergence of risks by a banking organization. The object of research is the activities of the bank. The subject of research is the risks arising from the implementation of this activity.

Banks are used to connecting organizations in the system of market relations. The activity of a real market mechanism would not have been possible without the formation and development of the activities of banking structures. The implementation of reforms in the banking system was the first stage in the process of economic transformation. The fairly rapid development of the banking industry is observed at the present time.